The Seasteading Institute wants city states in the open ocean

Last month PayPal founder Peter Thiel donated $500,000 to a new seasteading initiative from Patri Friedman, a Google engineer, and Wayne Gramlich, a former Sun Microsystems programmer. The Seastading Institute is an organization dedicated to creating communities in the open sea to experiment with diverse social, political and legal systems.

The institute plans to test a prototype of their seastead in the San Francisco Bay within two years but the ultimate goal is to establish deep-water libertarian city states where people are free to form their own society.

True to his libertarian leanings, Friedman looks at the situation in market terms: the institute's modular spar platforms, he argues, would allow for the creation of far cheaper new countries out on the high-seas, driving innovation.

"Government is an industry with a really high barrier to entry," he said. "You basically need to win an election or a revolution to try a new one. That's a ridiculous barrier to entry. And it's got enormous customer lock-in. People complain about their cellphone plans that are like two years, but think of the effort that it takes to change your citizenship."

Friedman estimates that it would cost a few hundred million dollars to build a seastead for a few thousand people. With costs that low, Friedman can see constellations of cities springing up, giving people a variety of governmental choices. If misguided policies arose, citizens could simply motor to a new nation.

"You can change your government without having to leave your house," he said.

Of course, one major role of government is to provide security, which would seem to be an issue on the open sea. But Friedman's not worried about defense beyond simple firearms because he thinks pirates will lack the financial incentive to attack the seasteads.